Is there such a thing as "passive" income? Generally no. A person can cash out existing brand equity and exposure, but if they cash out too aggressively and/or do not reinvest enough then they are ultimately cashing out their market position and will eventually fade.

Does Google Make "Passive" Income?

Online there are some network effects that are hard to beat. MySpace had them over Facebook & only lost due to years of systematic incompetence & mismanagement. But if you are boastful about your business model competition will come and eat your lunch. Look at all the Groupon clones. And even Google has to claw and fight for every percent of search marketshare.

A person could say "well Google makes passive income" and I would counter that with "not really."

So far this month Google has made about a dozen search interface changes or tests & the underlying relevancy algorithms have likely had at least 3x or 4x as much change.

Keeping Google's Marketshare Costs Big Money

The propaganda Google spreads include statements like: "users keep coming back to Google even though they have a choice of a search engine every time they open a browser"

While Google maintains that their monopolist marketshare is due to user appreciation of superior technology, a ton of their exposure is paid for. I was helping a friend set up a new laptop and the amount of Google added to the machine made me feel like Google is the new Norton or Symantec.

If you use the Internet Explorer browser to access the web it comes with a Google Toolbar.

That toolbar defaults to enhanced features enabled.

Google not only pays to be the default search provider, but as part of that they also pay to have competition removed from the default options list!

Google also pays for Chrome to be installed in the laptop.

If you are curious enough to click on the pinned Chrome logo then when it opens they try to set it as your default browser.

Ads are also included within the interface of their online tools. For example, if you use Google Analytics they may recommend you try AdSense, AdWords, or their affiliate network.

The act of logging out of 1 Google service may trigger ads for another.

Google bundled chat into Google+ & they were fined by the FTC for bundling Google Buzz into Gmail, a violation of user's privacy.

Google's doodle drawings on their homepage may also promote their other offerings

Even if you don't use Chrome or the Google Toolbar in Internet Explorer then whenever you use Google they suggest setting it to your home page.

And even if you don't change your homepage, Google paid to be the default search box on Toshiba's default start page!

If you manage to somehow avoid all the above Google payola then they also pay other browsers (like Firefox) to be the default search service. Further, they then wait for those 3rd party browser plugins to have security issues & then do a bundled cross-promotion there, thus turning competing browsers into ads for more Google crap.

And when you go to update Flash, look where they tell you to search from

If your default search provider isn't Google when you install Chrome they use an option screen to help you change it, with Google being the first choice

Either Google is fibbing when they state how much of their existing marketshare is due to superior quality service, or they are hedging a risk of losing marketshare to Bing by buying placement everywhere they can. And to me this really highlights one of the big issues with truly "passive" online income. In spite of Google's success (& the great network effects they enjoy), even Google feels the need to spend hundreds of millions of Dollars a year buying exposure for their own browser, buying default search provider exposure in 3rd party browsers, and ensuring new computers are filled with promotional Google crapware.

This sort of cross promotion is everywhere, from ads on Youtube promoting Chrome

to Gmail ads highlighting featured Youtube videos

and Google+ games having Chrome ads integrated as special items in the game

right on through to Google buying display ads promoting display ads.

Facebook realizes how powerful this cross-integration is & thus buys ads on Youtube as well.

But if you want to leave Google's ecosystem it takes a lot of effort, as Google is willing to advertise the Google alternative aggressively wherever they can.

Google recently extended their ecosystem of cross-referencing further by automatically adding Google Related to Google Chrome & the Google Toolbar, which recommends Google content within the browser no matter where you are on the web.

Google's bundling not only follows users around the web & personalizes ads, but it also bakes right into the core of their relevancy algorithms. Eric Schmidt stated "the internet would be better if we knew you were a real person rather than a dog or a fake person. Some people are just evil and we should be able to ID them and rank them downward."

Mr. Neronha said those efforts amounted to "window-dressing," allowing Google to continue earning revenues from the allegedly illicit ad sales even as it professed to be taking action against them. Google employees helped undercover Justice Department agents in the sting operation evade controls designed to stop companies from advertising illegally, he said.

"Suffice it to say that this is not two or three rogue employees at the customer service level doing this on their own," Mr. Neronha said in an interview. "This was a corporate decision to engage in this conduct."

Likewise, it costs Google a lot of money to deal with lawsuits that arise due to their business practices & lack of respect for copyright with photos, books & videos. They eventually had to develop an expensive video footprinting technology to adopt DRM features on Youtube.

likely violated Oracle patents (that will likely cost them in the B's)

had other patent issues which required Google to spend $12.5 billion buying Motorola (that is nearly 1/3 of the cash Google has built up through their IPO & saved profits in the 10-year history of the company)

Sneaky ISPs Redirecting Search Traffic

What is worse for Google, is in spite their default status, their huge ad budget, and being large enough to be sued regularly, even all that isn't enough to keep all the traffic they pay for, as there is widespread hijacking of search traffic by ISP providers.

Google Isn't Passive, but ___ Is

Google may have bit off more than they could chew & are certainly doing anything but being passive. But maybe some other companies that make great money are doing so passively. Offline that is certainly true in many instances, but online passive companies tend to disappear.

Look at all the work Yahoo! has done with their news box & their sports vertical, yet when you back out the cash on the books & the foreign investments the company isn't valued at much above $0. AOL has also cratered. In spite of their huge traffic streams they are not growing with the market due to search bypassing them & niche players picking them apart one vertical at a time. Running a portal profitably & sustainably is anything but passive.

Even deep into the long tail at the other end of the equation the profits may be every bit as scarce. Demand Media's accounting techniques show that they were far better at growing revenues than growing profits & the company may never be profitable.

The Limits of "Search"

Google & Bing keep eating more of the value chain through content scraping & a more interactive search experience that include new ad formats, like coupons & product ads with pictures.

In addition, search companies are challenging the boundaries of search by creating vertical media & ad networks that compete against a wide array of publisher websites.

The Huffington Post

Autonomy / Fast Search

Groupon

BankRate

MapQuest + TomTom

The Yellow Pages

Dell / HP

That "Shady" Competitor

When Google talks about "protecting users" one of the case studies / angles they push is the health angle:

The paid post at the top happens to be about brain tumors, which is a really serious subject. If you are searching for information about brain cancer or radiosurgery, you probably don’t want a company buying links in an attempt to show up higher in search engines. Other paid posts might not be as starkly life-or-death, but they can still pollute the ecology of the web.

While Google was using the life-or-death approach to policing link buying outside of their AdWords ad network, Google was knowingly selling search ads to Canadian "pharmacies" providing illicit drugs in the US. The official settlement document lists how Google insiders knew work-arounds to the automated systems & were working directly on managing the ad accounts associated with the illegal activities. Google had done so for over a half-decade & only changed their approach *after* they knew a sting operation was underway.

For those scoring at home, this has been Google's approach to the health vertical:

You can also do nothing wrong, but have your model undermined by looking too similar to a company that is exploiting Google's relevancy weaknesses & forces Google to apply retribution. A lot of small ecommerce sites were purged in the content farm update. What is so sad about that is that if not for accounting games & selling stock as a business model a lot of the biggest "success" stories in the content farm might not even exist.

While the above section focuses on Google, it could be about any competing business that touches the web...a bank which uses bogus accounting driving smaller banks out of business, a company that receives no bid government contracts associated with bribes & uses those "profits" to price dump in related fields, an ISP redirecting your traffic, etc. No matter how clean a business model looks at a glace, there is some gray area where businesses meet & exceed the numbers quarter after quarter.

Look, for example, at the sorts of links NetZero puts in some of their customer emails

Look closely at any mainstream media site & you will run into those ads.

Are Passive Revenues Impossible?

It really comes down to how you define passive.

If your site doesn't evolve & isn't aggressively marketed then eventually a search engine or another competitor will pick away at your advantages until you are soon found ranking #2 then #3 then #7 then #20 then invisible. Or you might get clipped by an algorithm all at once in a sudden stop torch job that makes your site essentially invisible, or it may be a slow & painful debt by a thousand cuts.

This is one of the reasons I generally prefer to have a site with a 30% or 50% profit margin over one with a 90% or 95% profit margin. Sure high margins are great while they last, but if you don't reinvest enough over time an algorithm or a competitor will eventually torch some of those high margin projects.

When it comes to online income, passive and reliable are not synonyms.

If you saved the margins you made while they were there then you are lucky, whereas if you adjust your lifestyle to that level of income & don't save anything then dark times have appeared.

Is Paid Search Incremental or Cannibalistic?

Earlier this month Google referenced a "study" they did which showed that 89% of AdWords ad clicks were incremental (meaning that they were clicks that the website would not have received if they relied on organic search results alone).

As part of that "study" they stated that "indirect navigation to the advertiser site is not considered." Why did they chose to exclude that segment of traffic? Because they advertiser would have got almost all of it anyway. They never really defined what indirect navigation is though, so you are left to guess as to what qualifies as being part of that segment.

The "study" also stated:

A low value of incremental ad clicks may occur when the paid and organic results are both similar and in close proximity to each other on the search results page. This increases the likelihood of a user clicking on an organic result as opposed to a paid result. Close proximity occurs when the ranking of the organic result is high, placing it near the paid results. Organic results triggered by branded search terms tend to have a higher ranking on average and this may lead to a low IAC value.

So which keywords should you advertise on? And which keywords are buying the milk when you already have the cow for free? According to Google:

A low IAC value does not necessarily suggest a pause in search advertising is in order. In fact, for many advertisers with a low IAC, it is still profitable to invest in search advertising. To evaluate the economic benefits of search advertising, an advertiser must run a calculation incorporating their individual IAC, conversion rates, and conversion revenue. The below equation can help determine whether search advertising is worthwhile on a case by case basis.

Is an Experiment Required?

Google later suggests that a more rigorous test would include a split test experiment that compares a control group against an ad group with paid search ads held back. They then suggest that "many advertisers are adverse to conducting such experiments due to the setup costs involved and the potential revenue impact from having a hold-out group."

What I don't buy *at all* is the suggestion that such studies need to be rigorous & expensive. On the organic search front, Google Webmaster Tools already offers organic search CTR stats by ranking position & ranked page:

If Google provides this data for free for organic search then why (other than protecting their own revenues) do they suggest this data is hard to attain for paid search? If Google respected their advertisers & wanted the advertisers to advertise based on complete data they would make this data available automatically, like they do with the +1 button data.

No "Study" Required

Here is my big problem I have with Google suggesting that I need a quantitative study to know if I should buy my own branded keywords:

the whole point of building a brand is increased affinity with users & not needing to pay for incremental distribution driven by brand demand. To spend money to build brand only to have to keep rebuying the existing brand equity is quite a futile exercise.

in the bid auction Google sets arbitrary pricing floors at the keyword level to squeeze advertisers (almost nobody is bidding on "seo book" but if I do Google will want $2 or $3 per click)

even if I go through said "quantitative study" I end up needing to re-test it every so often as Google arbitrarily juices the ad prices to increase their revenues

when Google offers the enhanced long sitelinks they are doing so because they think the search query is primarily navigational, yet they still put ads above the organic search results, which IMHO is pretty dirty

and the dirtiest bit of it all (that smells the worst) is that competing against you in the ad auction is not only arbitrary pricing floors, but also Google itself, which buys keywords against your brand (using their own monopoly money)

Larger Sitelinks Drive Down Competition

Google recently expanded sitelinks in the organic search results to make them take up a huge portion of the above-the-fold screen real estate, driving down attempted organic search brand arbitrage & negative reputation issues.

Zero Moment of Burning Ad Budget

Google promotes a concept called "the zero moment of truth" suggesting that you need to advertise just about anywhere late in the conversion cycle to "be there" and reinforce your messaging.

However, with enhanced organic sitelinks, the brand owns so much of the search real estate that it will lose limited traffic to competitors if it doesn't buy AdWords on its branded keywords. Further, given the ability to block certain sitelinks & edit the page title & meta description you should be able to control the copy on your branded organic listing to make it look and feel like the ad copy you would use in AdWords.

When You Should Buy Your Brand Keywords

Short Term Specials & Promotions

If you have an event coming up that you need to promote for a short duration of time then running AdWords ads is a great way to instantly get exposure for that campaign.

Certain Misspellings

In the past if you misspelled keywords Google would put the spell correction right at the top of the page. More recently they have decided to put it below the AdWords ads. So on this type of ad (where Amazon already ranks #1, but has the organic search results pushed down by the ad & then a spell suggestion) I think that ad is burning money.

In other cases, like where you don't rank high in the organic search results, buying AdWords ads on common misspellings is a much smarter idea. For instance, I think this is a smart ad buy by Agoda.

However, in the longrun, if I ran Agoda, I would point a few misspelled links at my website to boost my rankings for common misspellings.

One way to reach misspellings and longertailed searches for your brand is to use an embedded match, where you bid on agoda and then use -[agoda] as a negative keyword.

Brand is Shared By Multiple Companies

Mercedes Benz is burning a bit of their ad budget by advertising where they are irrelevant.

Certainly it makes sense for them to buy exposure for the branded keywords, but in the above examples they should put -kingston as a negative keyword.

When Google Runs Negative Ads

In some cases Google ads promote negative messaging. For instance, while using Gmail I saw an ad suggesting that I should "uninstall McAfee" in a computer that did not even have it.

Buying branded ads in those cases would likely make sense, if for no other reason to compete with & block out risky negative ads that could go viral. Whether Google should even allow such ads is another question for debate.

Mr. Neronha said those efforts amounted to "window-dressing," allowing Google to continue earning revenues from the allegedly illicit ad sales even as it professed to be taking action against them. Google employees helped undercover Justice Department agents in the sting operation evade controls designed to stop companies from advertising illegally, he said.

"Suffice it to say that this is not two or three rogue employees at the customer service level doing this on their own," Mr. Neronha said in an interview. "This was a corporate decision to engage in this conduct."

After the above instance, Google is perhaps going to be "guilty until proven innocent" where they are running sketchy ads.

In the short run it is likely appropriate to still run branded keyword ads while the issue is getting sorted out, but if you see anything like the following on your branded search results it probably makes sense to fight it on the public relations front in the background while opening the wallet to protect the brand publicly.

Smart SEOs have been preaching brand for years and years now (& so has Google if you read between the lines).

For some time Google has appended prior search queries in AdWords. In some cases they also show ads for related search queries, append your location to the search query for localization, spell-correct search results based on common search trends, and (as the Vince update showed) they can also use search query chains & brand related searches as a signal.

As far back as 2008 Google sugested previous query refinements for organic search, but they haven't been very prevalent thusfar IMHO.

While researching another article, I was searching for some browsers to see how search engines were advertising on various keywords, and after searching for Firefox I later searched for SEO & saw the following:

This is yet another way brand familiarity can boost rankings. Not only are you likely to score higher on generic search queries (due to the Vince & Panda updates), but having a well-known brand also makes Google more likely to recommend your brand as a keyword to suggest in Google Instant, makes people more likely to +1 your site, and it now also can impact the related organic search results further if people search for that brand shortly before searching for broader industry keywords.

An Interview of the Salty Droid

Interviewer:
Today we're going to interview not a person, so much as a robot, or maybe a person behind a robot. Who is the Salty Droid?

Jason Jones:
Is that the first question, "Who is the Salty Droid?"

Interviewer:
Yes.

Jason Jones:
All right. Well, the answer is, Jason Jones.

Interviewer:
Jason Jones. OK. Why did you decide to create a robot for your website or what was the idea behind that?

Jason Jones:
Well, I like robots first of all, because everyone likes robots. I was just using that as my online persona, and then the whole Salty Droid project developed underneath it. The robot just came out of nowhere, out of the blue.

Interviewer:
When you are writing or talking or compiling, everything you do is the Salty Droid? Do you view that as an extension of yourself? Or do you view that as something that separates yourself from what you're doing? Or how do you think of it that way?

Jason Jones:
I think of it definitely as separate. I try to keep it completely depersonalized or keep a layer in between it and me, because the robot is really angry and aggressive, but those aren't healthy emotions to take on personally. The robot is the character and the blog is the project. And it's more than just me. It's more than one person. There's a whole community there. I'm just one piece of it. I definitely don't think of myself as that, as the robot.

Interviewer:
That leads to two questions. One, you built a community around this, but then, two, you said that it's not good to have the anger and negative emotions. Do you view the community as being full of negative emotions?

How can you create a community that revolves around a character that has stuff you wouldn't describe as good? Can you build a community that is separate from the traits of the founder of it?

Jason Jones:
Well, the hyper-aggression and the bad attitude are mostly communiqué. And I think most of the people in the community. All the legit people in the community are really caring, good people, who get that the aggression is a joke.

The targets of the aggression the things that are going on that we're pointing to are really serious things that people need to stand up and say something about. It takes an aggressive tone that I don't think anyone really tries to personify the robot's charms.

Interviewer:
One of the things that's an issue online is it's really easy to point to what's bad or what's wrong. It's really easy to be cynical. But do you think there is enough good resources for people to find what will help them and what's good with the site mainly being focused on staying away from what's bad? Or can you focus on one too much or if you did both would it cause problems?

Jason Jones:
Yeah. I think mixing them up would be a terrible idea because of the specific thing I'm talking about. I'm totally sure that I don't know what is the good side of making quick money online.

Interviewer:
Right.

Jason Jones:
How can you find the right help to do that, because that is not a real thing. You can't make quick money online. It's really hard to make money online. That is the reality of the situation. As far as how people get help in accentuating the positives. I really don't see, what are the positives?

Interviewer:
From that perspective I think you hit on one of the things, is that a lot of the people have the mindset. Like, I got an email today, where the person said that they want to make something. They've been buying all these network-marketing things and they want to be able to make money really quick and easy without needing a PhD.

I've had other people say that they'd be willing to pay me a portion of the profits for whatever I taught them but nothing upfront. There's even been a person, he's offered me to pay me. They wanted me to rank someone else's page lower, a competitor. And offered to pay me after the fact.

[laughter]

Interviewer:
The big thing there is there's a lot of mindset where people try to take whatever they can get and take. And the thing is a lot of them end up running into a roadblock by the view of the need fast, easy, cheap, free or placebo cost, but need it to be automated and make a lot.

Do you think the big problem is the vultures or the mindset of people?

Jason Jones: The vultures. No, it is the vultures. It's not people's mindset and people's weakness and people's vulnerability, and people's desire to have a life that's different from the life that they have. That is just how humans are.

And there's certain ways you can capitalize that that are seedy and not very respectable, but then you can prey on it. You can become a predator. And that's a fallback excuse that people use is trying to characterize the victims like that, so that it feels less painful to think about.

That they are also exploiting this idea of like, "Hey, let's make the world a better place." That is exploited just as much as this greed tactic. It exploits good people, greedy people. Anyone who has human weaknesses is exploitable.

Interviewer:
What are the emotions you would say are most commonly preyed upon the "get rich" people?

Jason Jones:
In the "get rich" thing, greed is a part of it. For instance, I listened to a huge batch of boiler room calls. OK. I won't mention anything specific about, but 100 hours. And it's overwhelming. I heard a few calls where it was greed and it is this stereotype person of this chaser who wants to believe the impossible.

I don't think that's the majority. I'm not sure how big of the portion that represents, but it's not that significant. It's people who are afraid, people who want a brighter tomorrow, people who things are falling apart for and who are at a moment in their life where they are particularly vulnerable.

And it's not the same people over and over. People get ground out and pushed out and in comes a new batch. They're always looking for this new batch of vulnerable people.

Interviewer:
This is maybe a bit abstract or wide-reaching, but in the same way the monetary system is setup as being debt-based. To where if you have an income inequality and some people have savings, there's got to be some other people that are in debt or living right close to the edge.

Do you think how we structure our political and economic system, feeds into the people being vulnerable and desperate? Or do you think no matter how it was structured people would always be that way no matter what?

Jason Jones:
No. I think part of what's making people vulnerable is they're thinking that they don't have enough. And this constant buy-buy culture and the credit, lending. And it's not just personal. Everything is based off on debt. Debt is our currency.

People's weaknesses and personalities develop inside of that. It's a microcosm, the scammy end of the spectrum what I'm writing about. It's done very basely down at the bottom, but it's a reflection of exactly how things go all the way to the top. It's in the political structure. It's in the financial system. We're structured like this.

Interviewer:
Some of the patterns of the stuff you particularly don't like, is preying on people's emotions. Some of the stuff you do on your blog comes down to sleuthing and what Dereby called "investigative journalism", in a world where there is almost none.
How do you get so much of the data? Is this building the community help pull on to that stuff in for you? Or are you really technically savvy? How are able to dig so much stuff up?

Jason Jones:
Yeah. That's a human groundwork. It's a beat work. It just takes time. I started writing it and people started coming. And the more people come, the more people come. And then I keep quiet about who I'm talking to and I keep my sources confidential.

You'll see in the writing style I never say, "So and so says", or "This anonymous source." I never mention ever where anything is coming from. I just do it and if you read long enough you just have to come to rely on the fact that there is stuff going on behind the scenes that I'm not going to talk about. People don't want to talk about it, because it's a really cagey, dark situation. And people have their own interests and they don't want to.

But it started happening almost immediately. People started to come talk to me and I just talked to them. Keep it going. At this point I have this never-ending stream of information that just comes at me and only a tiny, tiny percentage of it ends up on the blog.

Interviewer:
You did a lot of interesting graphics stuff. Did you find that hard to do? How were you able to tie in the image and audio? Let's say you put up a five-minute video or a three-minute video and you make all you custom graphics, how much work goes into that?
[laughter]

Jason Jones:
A lot.

Interviewer:
It looks like it. Because I do the basic videos of like, "Here's the screenshot of this, and here's how it works." I make a three or a five-minute thing and I always screw-up in the middle. Then I get ticked off with myself, and start cursing on myself. I can imagine how hard it is to sequence all that together.
Have you gotten more efficient with that over time? Or what did you use? Was it just a lot of hard practice till you get used to doing it?

Jason Jones:
Yeah. It was just practice, because the first time I had no idea. I had a reason, a motivation to do it. I just would do it. But that big epic video they were talking about Jeff Foster and Andy Jenkins. They were talking about the Syndicate and telling me to go fuck myself. That video took 36 hours, probably.

Interviewer:
Wow.

Jason Jones:
It was just a long time.

Interviewer:
What takes more time? Is it cutting up the audio, or creating the graphics? Or figuring out what pieces you're going to use?

Jason Jones:
Yeah. Everything goes wrong, and the audio formats don't match. You just have to get a few parts in. You restart, because you feel like your idea was idiotic.

Interviewer:
Have you thought about making videos about some of the stuff you do? There's one site I subscribe to. Financial advice where the guy is totally low-key, he's always questioning himself. His website's called iTulip." And he makes these amazing graphs comparing different asset classes over time.

Sometimes he's like, "Yeah, I did this pretty quick," but he's taking a long time for most of it. Have you thought about some of the stuff you do, like creating tutorials on how to do some of this?

Jason Jones:
No, definitely not. Because one, that reach was the thing I'm talking about. And I don't want to do anything even close to that. Just to keep the line totally clear. Two, I have a hard time explaining the things that I'm doing to people who aren't me. It's hard. I know a lot of different little tricks. I don't know. You've got to figure out your own. Figure out your own little tricks.

Interviewer:
With the stuff you're doing, if the site gets more popular, if you ever decide to do so many years down the road, so many months, so many years. At some point do you think you're eventually going to lose passion for the project? or do you see yourself doing for years to come?

Jason Jones:
I don't know. I like it right now. No. I see myself doing it for a while, because no one's doing it. If I stop doing it, then what? It's something different is gone. I don't want that to happen.
I'm a fan of the site. I like it. I love the site.

Interviewer:
What's the hardest part with running it? Is it doing the stuff yourself? Dealing with how other people interact with it? Or dealing with what people do away from it? Or what's the hardest parts with it? You were struggling with like stuff like people taking down social media accounts.

Jason Jones:
Yeah. That's the hardest part, because that's disappointing. When I first started, I expected that this project would have the support of the Internet community. Because it's the Internet community, that's creating the distribution system for this vicious scam. And people don't like it. It's not popular. Things that these people do aren't popular with the normal people you want using your websites.

I thought people would be behind me. Plus, that's how it's supposed to be. In America, there's this like illusion that you can say whatever you want. And it's all just like Wild West speech around here. But it's not like that at all. The Internet companies don't support you. It's way more work than it should've been just to keep the site existing.

That's not fun work to try to keep it up. That doesn't do anything for the cause. It doesn't help anyone. It's not helping me. It's a waste of time, and it's totally unnecessary. I'm obviously not going to lose. They're not going to be able to get rid of me, so it's a waste of their time.

I think that's the most disappointing part, getting banned from all these different social networks, getting banned from hosting sites, having to resort to...

Part of the trap is that you go onto YouTube, and you think it's an open forum where there's multiple voices. If people are getting scammed, they're going to be making YouTube videos, just like these scammers are making YouTube videos. And those two will weigh each other out, but that's not it. If someone wants to take your content down more than you want to keep it up, it's pretty hard to keep it up.

Interviewer:
You mentioned something about that being an illusion. Well, you mentioned part of it being technical stuff related to that, but you also mentioned it being an illusion. Do you see that as a pattern that's always been that way in society across all cultures? Do you see the Internet making that better or worse? How do you feel about that?

Jason Jones:
Well, this particular thing that's dangerous about the Internet is that there's a perception, more so than ever before, that dissent is available. When you could only distribute through the paper, you knew it wasn't open. It was incredibly limited by whatever the publication medium was. You could think about that as you were looking.

But now you get the idea from everything in the media and from most of the stuff on the Internet, that the Internet is the voice of the little guy. But then when you go and look, you find out, "No, the little guy gets silenced still, and his voice is not there"

But now there's holding out that his voice is there, and he's just not saying anything. So, he must be happy about it. He must not have just got his credit card maxed out and had his wife leave him. And suddenly drinking a fifth of Scotch a day.

It's not that those comments never pop up. It's that whenever someone gets that boldness, they get slapped right back down. And they're not in a position to fight back. I'm speaking about it in my own personal experience from this scam area , but it's obviously like that across the Web, too.

You want to talk about gas frack explosions in your back yard, like you can bet there's dozens of people who put up things. Then some company's hack lawyer came along and demanded they take them down. They didn't know their rights, and they can't afford to be availed to seek any counsel on those rights. It's just easier to take it down. Should not be like that.

Interviewer:
There's also the extreme of false complaints and sites like Ripoff Report that have been called a variety of things. I don't even know what words I could use without availing myself to a lawsuit. [laughter]

Jason Jones:
I'll say it, extortion racket. That's what people accuse them of, of running an extortion racket, because it looks a lot like that.

Interviewer:
How does the consumer separate out? You think people are falsely confident that they have a full spectrum; how can they become more aware of stuff they should trust versus stuff they shouldn't?

Jason Jones:
That is a good question. I don't know. Knowing who to trust is a hard thing to do, especially on the Internet, because of how many different channels and how many different voices there are. Because right now, at the moment, as we speak, things are running wildly out of control.

Interviewer:
Things are running wildly out of control, what does that mean?

Jason Jones:
If you don't know, if you're not sophisticated on the Internet, it's dangerous. It's dangerous to spend money on the Internet. It's dangerous to put your credit card on the Internet. Yeah, it's hard to tell.

You can't go to Ripoff Report and trust what's there, when you know that sometimes the complaints are false. And that no one's editing them, and the person in charge isn't at the wheel. Or is running a corporate advocacy program where he's taking the side of people who are known scammers. The Internet is turning things seedy.

Interviewer:
Yeah. Part of that is that the Internet naturally has network effects built into a lot of different things, like the first person in the search result's going to get the bulk of the clicks. The leading search engine's going to get the bulk of the search traffic. And you see that with systems like....

I'm talking to you on Skype now, and it's got tons of users. Isn't it, though just how businesses run? A lot of businesses start off pure, and then grow. They get larger. Get dysfunctional through their size. Then they just have to keep making the numbers?

Jason Jones:
Yes. That's clearly what's happening.

Interviewer:
It's not really just a web-only phenomenon.

Jason Jones:
Oh, no!

Interviewer:
It's just that on the web you feel you're getting more diversity when maybe you're not. So one thing on the web...

Jason Jones:
That's the big difference I'm pointing to on the web, is that there needs to be a disclaimer, so that people have the idea. But that won't work either, so there's just no way.

Interviewer:
Yeah. I think the key is building good internal filters for who to trust, but anyone who's new has a hard time with that. It's almost like you have to get struck down once or twice somewhere to...

Jason Jones:
Exactly. It's hard when you come right on. The sites that I trust, and the things I trust on the Internet are the ones where I can smell the person behind it. Once it gets out the point where it's so big you're not sure what you're looking at reported, like Huffington Post. It's like at first, it was a thing. Then at the end, it's just this big goulash. Then it's like, "I'm not going to look at this anymore. I can't relate to it."

Interviewer:
Right. You think that it's having the character and a voice of an individual or a small group of individuals that you've learned over time is valuable. The more depersonalized it becomes, the more mushed, the less you can trust it.
I had an interesting thing along that lines, when Google recently did an update called the Panda update, and a lot of larger sites from big brands got a big boost. But then, a lot of the independent sites actually end up getting crushed out that didn't have the brand. It sounds like the relevancy algos are going in the exact opposite direction of what you're saying is best for the web?

Jason Jones:
Towards the bigger? No. That is bad, right? That's the old-school way. That's the thing that is so not working. Let's not put that on the Internet and do it again, where it's even easier to scale up to an irrational size, become unreasonably big and useless in all of your ways.

Interviewer:
Have you seen my weight scale that posts to Twitter, is that what you're saying? No.
[laughter]

Interviewer:
Let's see.

Jason Jones:
Although I used to like Google more, before I started reading your blog. Because then I saw them more as a heroic force, and then the way you talk about it. Yeah, I can see how so many of their tactics are little guy squeezing, which is really not what I want to see happen on the Internet.

Interviewer:
It seems that offline, there's growing income inequality. And maybe technology only speeds that up as well.

Jason Jones:
No. That's reflective of the offline world, too. Everything is way too big. Big groups are the worst, most unreliable. It's one of our worst human inventions, forming giant groups. And the bigger the group is, the stupider it is. Yet our whole economy is about building out the biggest possible things.
I'm not an expert on this, so I don't know why I'm running my mouth about it.

Interviewer:
There's a book I read called "A Thousand Years of Nonlinear History." I will admit that the reading was deep and beyond my level when I first started. But it was interesting, so I stuck with it. And one of the things he said is that it seems that we've always sacrificed variety in favor of homogenation to increase yield, as a general piece of capitalism.

Online, some people will come, to your blog and say, "F*ck you, you stupid robot!" or stuff like you would never see people do in person. Where they're really enraged. Do you deal with a lot of that? Or do you think people view you in that way? Or how do you get the humor angle across without turning people off?

Jason Jones:
Well, the blog is supposed to be complicated, so it's not easy to understand. When you first get there, it's not supposed to be totally clear what's happening. Because I like it like that. Part of the message, like this looks like it's coming, this looks bad. When you just first glance at it, you're like, "Oh, this! I'm not sure this guy should be doing this, Geez! Does he have to go that far?"

But then you stay for a while, and then it's really easy to figure out. I don't think it's just like a mystery to anyone. But the trolls, that is rage. The site doesn't really get that many trolls in a traditional Internet sense, where it's like someone who's just popping in and they're just trying to get a rise out of a group. And then they thrive off of that. There is some of that, obviously.

But much more what happens on the blog is people who come to try to defend their own financial interests without disclosing that. And because this transparency and jokes, especially affect their day-to-day numbers, they have some massive overreactions. I get that in public and in private every day.

Also, people who have an idea about something that they think is possible, and it's not possible. Then they start to figure out that it's not possible. Then they want to lash out at someone about that. A lot of times, that ends up being my robot, which is a good thing to lash out at, actually.

Interviewer:
What do you mean by that, that they find out something? What are you saying, are you saying like making money quickly, or having some system?

Jason Jones:
Well, the specific stories I'm writing about, it follows a much more cult-like pattern, where they're trying to disrupt your normal way of thinking. They're explicitly doing that. And they're filling you with this other thing, which is convenient for them. Which ends in giving them your money and most of your time and part of your life for a while. Then they just dump you out at the end. When you're in that process, it's like a very deep, dangerous process to mess with people's personalities like that.

When you wake up out of that and you see, "Oh, I've been kind of semi-delusional here. I've been lying to my family. I've been being aggressive to my friends." "This is affecting my life," and just, "This is not as advertised," it's hard to face up to that. Lashing out at the Salty Droid is often...

And I also get, along with the death threats, I also do get a lot of apologies.

Interviewer:
Do you have any way of gauging how much you help people at all? Do you get thank-you emails every day? Or do people tell you that they were in a like crappy spot, and then they came across your stuff, and it changed their way of thinking?

Jason Jones:
Yes. I get those always, all the time. And it's much more in private than on the thing in public.

Interviewer:
Yeah, because I would imagine people might feel a bit embarrassed to admit that they were getting ripped off or something.

Jason Jones:
Yeah. A lot of the stories I hear are so personally tragic, and they contain so much just like horror that people don't...
Talking about them more is painful, and people definitely are uncomfortable talking about it in public. I'm sorry, what was your question?

Interviewer:
Well, continuing from where you were, is that largely what drives you to keep going with the site?

Jason Jones:
Yeah. Definitely. Without that, it would be too hard, because there's not a lot.
Sometimes I wonder why I'm doing it, but families especially like in the James Ray situation. Well, all of the situations. For every outrageously stupid comment, threat, or whatever that I see or get, I get 10 from the other side.

Interviewer:
You mentioned a group called The Syndicate.

Jason Jones:
The Syndicate.

Interviewer:
What is that? Do you think there's five or 10 or 20 or 50 different groups that are aligned similarly to what you mention? And you just honed in on one group? Or do you think that one has more reach than the others? Or why so much focus on this one group? You also mentioned that it seemed like some of this stuff weaves together. Can you describe how that is? Am I making any sense or not?

Jason Jones:
Yeah. You're right. It's that I focus on The Syndicate. But the idea is that this white-collar fraud that's going down in all different formats, not just the Internet, in all different transmission methods, they're using these cartels. The cartel system is one of the key features in lots of different scams that you can look up.

You get close enough and you look close at it, a key feature is cartels, false testimonial, keeping people out of the market. Having an in-group and an out-group, and a secondary tier, lieutenants. If you look close, the organizational structure is there to see across all different forms of people.

But I just focus in on The Syndicate because that's where I started. I like to say things that I have public, that I have proof of that I can put out there. That's just hard to come by.

I want to finish that story. The Syndicate is a big. They did big-time damage. They're on these audios that I have all over the website. Like just talking openly about violating the laws, and there's 1000s and 1000s of individual stories of how these people have wrecked lives and taken millions of dollars. And I'm going to keep on it until something changes.

Interviewer:
Why would they record those calls? Or how would those calls end up recorded then? Like we're recording this one.

Jason Jones:
Yeah, they record. They like to. They're narcissists. They like to hear the sound of their own voice, and they record their calls. They record all kinds of things they should not be recording. Even after I get some of those recordings, they keep on doing it, because they don't learn any lessons.
Like the last one I released, which was that boiler room call. The boiler rooms, they record their calls, because that's what boiler rooms do.

Interviewer:
Do you sometimes feel like a man trying to hold back the Sahara Desert in a way, because this stuff's everywhere? Or do you think if you make a big enough difference in one area, people will carry on and help in other areas? Like it spreads out in circles?

Jason Jones:
I don't know. That's what I want to think about when I'm in a drum circle. I don't know how realistic that is. I hope that's how it is. I hope there's all these magical, beautiful butterflies being born, because of what I'm doing.

Interviewer:
Part of media has always been if you go to other forms of media, stuff spreads out, and then it reconsolidates. Like there's a bunch of people experimenting. And then ultimately, a lot of that comes down to social signals. Like people trust what they think other people trust.

You did a good job marketing your site, especially on a very small budget. What were keys to getting well-known exposure, spreading your ideas?

Jason Jones:
I don't know. I try not to think very much about that. Because if you're going to start a blog, and if you want to start a real blog. Not the way people I talk about, talk about starting a blog. But if you have something to talk about and you want to start a blog, then you start it. People aren't going to comment first. And you want people to read your writing. They're not, so then how do you stay motivated to keep writing? It seems like a trap.

The key is to focus on the thing that you are writing about, and have that be the thing that you care about. Because the thing that was clear immediately is that it didn't matter how big of an audience I had. If it was zero or 1000, 10,000, it didn't matter.

From the very first word, sound I made on the Internet, the people who I was talking about, they heard. That's it. You have to focus on the audience or the thing that you're talking about, and the Internet can allow you to interact with them.

If you stay focused on building a quality thing and caring about the thing that you're actually writing about. And being a responsible advocate for that thing in whatever form it is, obviously not my crazy format, but that's the important thing.

How you end up like getting popular. Now I'm popular, but I really don't know. You tell me how that happened. I don't know.

Interviewer:
Did you make the number one most popular robot? Or, number two most popular robot online behind GoogleBot? Get you a little plaque made up?
Three years down the road, you decide you have a great idea, or you think you could really help people. It's not big, bureaucratic, dysfunctional, large company, but you eventually want to start doing something where you think you help people. But it's going to be more of a money-making enterprise, rather than something that you're just doing for free.

Do you think the marketing lessons you learned from building the Salty Droid help you, more than any of the bad karma from people hating Salty Droid? Some of the people who you've exposed hate that obviously. And whatever you do going forward, there's going to be some connection, right, between them? In terms of people will try to connect them up?

Jason Jones:
Between this project and my next project, you mean?

Interviewer:
Yeah, I'm not saying that you're going to go from Salty Droid to SaltyMillionaire.com. What I'm saying is like whatever you do next, the web has a way of tying people or things together. Are you worried about that at all? Or do you never really plan on trying to make much money online, just do what you're interested in mostly?

Jason Jones:
Well, I don't believe that you can make money online, number one. And no one's ever been able to convince me by showing anyone who's doing it.

Interviewer:
Well, we'll do a sidebar after this.

Jason Jones:
First of all, it's like an art project in my opinion. Once I'm done with it, hopefully it'll still be up. It'll be there forever, and that's one of the cool things about the Web. I'm really proud of it. I don't plan to be haunted by it in my future endeavors, although I really don't want to stop doing it.

I don't have some aversion to making money from it. I don't think it's evil to make money off of the Internet. And I'm kind of getting close now. Now I have a big audience, and if I wanted to try to do something non-exploitative, I have some ideas that I think could work. And I'm definitely not against turning it into something.

It'll be weird now if I make money online, because my primary message is that you can't make money online. But it is like that. It's like, "Yeah!" If I end up making some money doing this it's because I built up a mass audience.

But that's almost impossible, so much that you should not be thinking about that. If that's one of the specs in your business plan, "Build up mass audience," then forget it. That's not a realistic goal.

Interviewer:
Unless you can keep the cost structure low while you're doing it, and you're having fun doing it. If you're having fun doing it and you don't have too high of a cost structure, then you can stumble into a business that way, because you've already built up all this leverage already.
I think what harms a lot of people is they say, "Hey, I got online yesterday. I need to make a bunch of money tomorrow." It's just like a new person to the stock market that's probably going to get served and lose all their money.

But if you keep a cost structure low and do what you're interested in, it helps. You mentioned how it attracts people that are similar. And you build a community around it. That's how I started. When my blog came out, or when I first made my blog, it was a default web template. Three months in, I could afford to buy a $99 logo.

Jason Jones:
Yeah. Well, that's the way to do it. And I'm not saying that. Obviously, some people have success, too. But it's not going to be instant, and it's not going to be easy. It's not going to be any of those things. And then, you don't know exactly why you're successful. Maybe you think you know, but I don't believe that you can know.

Stuff is too complicated to be extrapolating out such specific details, and there's so much chaos that surrounds you and the things that you do. Trying to predict things like that or plan for them, you've got to have some core value that you're about and focus on that. Then you can hope that it gets really successful and big. But maybe you're being useful in the interim period if that doesn't happen, or if that takes a long time.

Interviewer:
A friend of mine, a close one,, I always tell him, "Hey, do something you're passionate about." They're like, "I don't want to do something I'm passionate about. I just want to make money." And then it's like, "Hey, have you been working at all on that?" and they're like, "Nah." I'm like, "That's because you're not passionate about it."

Jason Jones:
Sure. Although that advice about being passionate about it, I guess that's good when you're trying to pick something to try for yourself, but most people are kind of like slaves and they're forced to, and there's not that much you can do about it. I want to do something I'm passionate about.

Interviewer:
Why did you choose a .info extension? Outside of Germany, there's like three legitimate .info sites in the world. Salty Droid being one of them. What made you choose this?

Jason Jones:
Yes. There's a post about it, it's called Deiss and Belcher's Big Mistake. I was flashing my teeth at them about it, but I really didn't care. Because it was just stupid, I just got .info. And it's worked out just fine.

Interviewer:
Yeah. Have you ever made any posts that you'd later regret? For example, you saw someone doing something that was kind of shitty, crappy? And later you saw like them do something decent. And then like, "Maybe I went overboard on that." Or do you think that by the time you collect enough, that you're pretty certain that someone is what you think they are by the time you write it?

Jason Jones:
Exactly. Like at the first, there at the very beginning, I was just winging it a little bit. But then I was just poking small holes at people anyway, so I don't regret any of that. Once I got going, I don't talk about someone until I know their position inside of the system. And I have to have heard someone telling me a story that's just like, "Ugh!"

Otherwise, I would never speak to someone like the robot speaks. I'm doing that on purpose, and I'm careful. Hopefully I never make that mistake.

Like someone will tell me about someone, and I'll watch them for six months before. Because you can't go off, that is a responsibility I have. You cannot do what I'm doing to just an average citizen. I wouldn't accept this kind of behavior in a different situation.

Interviewer:
You think in some way ignorance is bliss? Do you think you would feel better if you didn't know all this stuff? Or do you think you feel better knowing that maybe you helped some people?

Jason Jones:
Ignorance is bliss if you're ignorant and you remain ignorant of all things, so that you can't tell. If it wasn't this, it would be something else. There's bull crap going on all around, so there's plenty of reason to be depressed. I don't find this particularly depressing, because everything's depressing. Tsunamis are depressing, too. If you're reading about the world, there's lots of stuff that needs to be better. That's just the perpetual state of everything.

Interviewer:
You're not going to know how you're going to become successful? When were the points when you thought that what you were doing was some little side thing, to where you really believed in it? Were there steps where you said, "OK, this was?" Do you look back where you say, "These are the five things that really made 80 percent of the difference?" Or do you think it's just going to bat every day? Or how would you describe it?

Jason Jones:
I could tell from the very beginning, which I didn't know before I started doing this, but was was really clear right from the start. That what I was doing, was agitating the bad guys. It doesn't matter if I'm popular or not, this is agitating the bad guys, and that's helping. Like the way I'm doing it, I'm doing it in a particular way. And it's helping.

I also could tell right from early on that this is helping victims. This gives victims a zone to think about what's happened and like gives a chance for reasonableness to leak back in.

The people who are involved, the parties to the thing that you're talking about on the Internet, this is true. From my experience so far, no matter how small you are compared to the thing that you're talking about. If you're going to complain about YouTube's policies, then the people at YouTube are probably not going to hear that. But there's not very many settings where if you say something about someone on the Internet, they're not going to hear it.

That's powerful by itself. It doesn't matter if no one else reads it, you can talk. If you see something you don't like, some problems, you can talk about that thing. People who are involved in that thing, you can talk to them, so that isn't dependent on getting a big audience.

Interviewer:
Do you think that's because people realize how things can snowball? And they want to see what's going on and try to minimize it early?

Jason Jones:
Yeah, because people are like narcissists. Like you send someone something and say, "I wrote this about you," they're going to go read it. Only people who have massive information overload where they're getting so much in that they can't process it, which is how all the gurus pretend like they are. But once I started to get popular, I could tell, "What lies!"

It's hard to know when you first get to the Internet, but it's not that. I'm popular. I'm not overwhelmed. I can keep up. I read all my emails. If you sent me an email, then I have read it. And I think almost everyone is like that. And if you've said something about me on the Internet, I saw it, because that's just how it works. There's not that many people talking. Like I mentioned that James Ray's PR guy, who's also the PR guy for Goldman Sachs. I forget his name now, Mark Fabiani.

Interviewer:
All-around good guy, obviously.

Jason Jones:
Yes. And he came. I know he saw it, because people can't not come see their own thing. That's really powerful, right there. That was the "Aha!" moment. Right as it started going, I could just tell right away. Like, "Oh, my gosh! They hate this so much!" That makes it worth doing it.

Interviewer:
Did you actually send the people emails, like, "Hey, I wrote this about you?" When you first launched, were you doing that?

Jason Jones:
Yeah, right. At first, yes.

Interviewer:
OK, That was key to getting it to spread right there, because you were going to write...

Jason Jones:
Not really. Because I only did that right at first, after that, I could tell. Well, because I thought I needed to do that. The way the web works now, you don't need to do that. I never do it now, like I say something about it.

Interviewer:
I don't think that the web changed so much as your website's authority and reach changed.

Jason Jones:
No, because this way predates that. It goes way before you ever came to my website. If you look, the video's taken down now. But there's this video of Perry Belcher complaining about me. He calls me an "asteroid asshole" from the stage at this Austin Internet marketers event. And that was like 10 days into it.

It's not because I was important at that time. No one knew me. And the tone I was taking made it seem like no one will ever listen to him either, because you can't talk like that. Everyone knows you can't talk like that.

Interviewer:
Do you think that there's...?

Jason Jones:
He was complaining in front of the marks in the room, just like he was that disturbed that he would say something about it from the stage just a few days into it. The web is powerful for talking directly to people. If you have something to say to someone other than Barack Obama, put it up on the web, and they will see it.

Interviewer:
Why is Barack Obama so much harder to reach than W.?

Jason Jones:
Well, because...
[laughter]

Interviewer:
I don't know if you realized it, but a lot of what you're mentioning is actually just a lot of marketing concepts. You're talking about do something you're interested in. Find people that are relevant. Find people that are kind of egotistical, not saying that you have to feed in and kiss people's asses. But feed into knowing who will respond and how they'll take it.

Then you also mentioned something else. Like, "You're not supposed to do this. You're not supposed to do that. Most people wouldn't do that." A lot of times a lot of rules and concepts of rules are set up to keep existing market leaders in their place and prevent others from disrupting them. That's a lot of the point of how Eric Schmidt famously, "The lobbyists write the legislation,"

When you talk about all that stuff you're doing, when I hear you I'm like, "OK, this is a marketing step. Be relevant. Be interested. Know your market. Connect with them, have a point of differentiation." Do you see how a lot of this stuff you mentioned? You didn't mention it using particularly marketing words, but it almost sounds like a marketing plan?

Jason Jones:
No. Blogging is like a marketing thing. I'm not denying that. I don't put out art on every post, because I'm just so passionate about art. It's because that's an effective way to communicate. I am trying to do a good job of being an effective communicator. I am trying to build my audience. I'm not saying that's not one of my goals, or that that's not important or fun.

I hope I'm a good marketer. Although they say that to me in the comments all the time as like an insult.

Interviewer:
You're just a marketer.

Jason Jones:
I'm a marketer. Oh, that's great. This is great marketing, bud.

Interviewer:
Well, I think that it's hilarious, because a lot of bloggers do that with SEO, too. Like if I write something, they, "Oh, more SEO bullsh*t!" And then like a couple years later, after the same guy said all SEOs are a scam, he'll say, "Oh, yeah, that was one of my link-bait efforts."
[laughter]

Jason Jones:
Right.

Interviewer:
It's like, "You transparent jackass! Why would anyone trust you now?" Like that, "Hey, I was full of sh*t a couple years ago, but you can trust me now."

Jason Jones:
"Remember when I was a liar? Those days are in the past."

Interviewer:
"Well, I think they're in the past, but I wouldn't bet on it." Or, "I'd like to bet against my own." Pete Rose style.

Jason Jones:
I hedge!

Interviewer:
Goldman Sachs, "We're sort of long this..." Define "sort of" and "long". In English or French?

No!

If you had to start over from scratch today, what are things that you would avoid doing that you did?

Jason Jones:
I would not use Twitter.

Interviewer:
Not use Twitter?

Jason Jones: Because it started on Twitter. It started as like a Twitter character, and then I put a lot of effort into this Twitter character. And I thought Twitter was a really cool way. That dynamic I'm describing, it's particularly real in social media. If social media platforms were actually there for open debate, like I could go onto Twitter and talk to Perry Belcher. Not only could he hear it but he had the sense that everyone else heard me.

That made the things I was saying, even if at first I had five followers, but it doesn't matter. It's still in search, and people could still hear me talking to him. That seemed really powerful.

And I spent a lot of time building that thing, and then they take it away. They can take it right out from underneath you. They don't have to tell you why. You don't have any rights to the things you're creating. I hadn't backed it up or anything, so it's like that whole period is just gone. They just took it. And they never said a word to me about it.

I'm careful about that now, and not just Twitter, either. If you're building something controversial, do not build it on the cloud, or else you can lose it.

Interviewer:
OK. It seems like there's almost two marketing things in there. One, it's important to have autonomy and control of what you're doing, right?

Jason Jones:
Yes, definitely.

Interviewer:
And then the other would be you can maybe get a bit of attention with those, but it's not worth putting too much effort in the social networks. Because it's better to be a big fish in a small pond, or to build your own pond, rather than swim in an ocean where the current...

Jason Jones: If I was going to build something new now that wasn't like...

The Salty Droid is a special exception.

I don't think people are getting booted off of Twitter left and right. But if you're trying, if it's some form of dissent, then you're just wasting your time building it out on someone else's platform where they're probably going to take it away.

Interviewer:
And what about that other thing, about like the big fish in a small pond? Do you think that it matters? It's better to be really relevant and focused and niche than to be on something bigger and just be one of many? Or how important is it to have some level of differentiation? Like a focus on building your own thing? Do you think that you ran your own blog was really important relative to being a participant in some forum?

Jason Jones:
Yeah. Ultimately, I regret spending all this time where I was building something for someone else. Like I was building Twitter's site out. I was adding something to Twitter, but they don't care about me. I'm not looking back, why?
And I worried that once my Twitter account got banned, because I was using that primarily as the main part of my voice. The blog posts were actually much shorter back then, because I spent so much time working on Twitter. Once I was gone, I thought, "Well, now, you know, that's going to really hurt my popularity. Most of my clicks came from Twitter, and like I wonder if this is the end of it."

But I could tell, within a few days it's like, "No, now I'm over here, and this is the place to hear me now. Over here on my place, and now this is where people are coming. Maybe this is what I should've been doing the whole time.

And then if Twitter wouldn't have banned me, I would actually be less popular, because I'd have spent more time. I would've stayed there, because I was having fun, because real-time baiting is fun. And that ultimately is like is a waste. It's not anywhere near as powerful as holding the keys to the thing yourself.

When you can see the back-end, I can watch, too. What happened to the clicks, and where they come from, and where they go. I just control. I get so much more information if I'm holding the keys, so...

Interviewer:
How do you use Twitter?

Jason Jones:
It is an afterthought. If you're spending more than half of your time on Twitter, that seems to me like a waste, any of them.

Interviewer:
Have you ever thought about creating the ultimate guide to online baiting? Not "debating", but "baiting?"

Jason Jones:
No, I could. That is something I have expertise on. No. Because what I'm doing, not to be immodest but it's for professionals. You have to be careful talking like that. If you're good enough at baiting, you can destroy someone. That's not very nice. You should keep that mostly to yourself.

Interviewer:
Do you ever find yourself reading comments on YouTube or anything, like to perfect your craft?

Why Analytics Are So Important

With SEO the most important thing to track is performance. Of course the bank account (& its growth rate) is a high level tracking mechanism, but it is the result of the combination of many ideas & efforts, the combination of multiple marketing strategies & traffic streams. To dig in further on what's working web analytics are your bread and butter. They don't give you aggregate data or could be data, but precisely and exactly what is happening on your sites: separating out what is working from what is not.

Without analytics you are flying blind.

Which is, of course, dangerous!

Redundancy for the Win

Most web analytics tools are either good for realtime tracking or offering granular historical data. Few tools are available at a reasonable cost and great at both. For that reason, I prefer to always use at least 2 web analytics tools.

If you love Google's feature set but want to host your own data they still sell the Urchin software for $10,000. It offers additional features like logfile analysis, robot & spider reports, individual visitor drilldown, server errors, works on intranets, and so on.

There are many other high end providers like Omniture, but I haven't really played much with them as most of our sites tend to be affiliate sites. If you do have a complete customer loop on your site & a sign-up process then services like KISSmetrics & ClickTale further allow you to dive in on how individual users use your website.

Back-up Web Analytics

My general goals & preference with a back-up analytics tool are:

light weight (doesn't use significant server resources)

low cost

provide a general overview baseline to compare primary analytics against

offers realtime data (as some of the primary analytics tools have a delay to them & having realtime data allows you to see how, where & why your content is spreading, which can help you further engage in conversation and help to spread it further)

As for the back-up web analytics tool, I typically go with Mint because it is quick and easy & only costs a one-time fee of $30 per site. Installation takes about 5 minutes, you upload it & then it just sits there and does its job.

I have also tried Piwik & Open Web Analytics. Of those 2 I prefer OWA because it is more lightweight (Piwik may have more features, but has a lot of files). OWA also has a cool screen recording option baked into it. Be aware that if you have a high traffic website & use OWA that you may create too many MySQL connections and cause the server to be less responsive.

If you are fine with tying some of your websites together but do not want to have them tied together in Google Analytics then you can have one install of OWA or Piwik on a dedicated server & set up multiple profiles for different websites. Be aware that if you have things like screen recording turned on then you are going to be eating significant server resources!

Your Turn

The Big Portals Can't Grow Ad Revenues

In spite of the transitioning of print Dollars to digital dimes for print media, TV advertising remains healthy and robust. Much like the decline of print media, the flow of brand ad Dollars online is skipping over even some of the largest players, leaving them out of the growth from the shift to online media.

Why Can't the Portals Grow?

Part of the lack of growth in ad budgets for the large portals comes down to hype around mobile (which is now ~ 12% of search ad clicks), Facebook & social media. The brand ad Dollars that are being spent to "look cool" are riding the new fads & trends.

Riding the social hype, now even AdWords ads have a social element to them.

Three other big issues that are impacting the portals (discussed further below) are ad retargeting, custom integrated media buys, and the mixing of traffic quality.

As a baseline to consider how significantly these trends are impacting the big portals are, consider that...

... yet their quarterly traffic was roughly flat compared to Q1 & revenue was up 32% year over year. In spite of having a search-first distribution strategy, getting hammered by Panda, and removing tons of content, Demand Media is still growing far faster than AOL or Yahoo! are. Thus it is no wonder that Yahoo! & AOL are not highly valued by the investment community.

1. Ad Retargeting

Between contextual ad targeting & ad retargeting advertisers have many options to reach their audience without paying premium ad inventory rates to show up where they are less relevant.

At first I thought ad retargeting would lift CPMs as another ad channel to compete for inventory. For smaller sites about knitting or celebrity gossip it probably does, but for "premium" media that is way overpriced, it does the opposite. At first this hit some of the sorta b-list sites but not the big portals, then over time that trend grew and it eventually even consumed the big portals.

Google took ad retargeting mainstream. At first advertisers bid artificially high for this traffic, based on its perceived value, but since these advertisers were largely only competing/bidding against themselves & these ads can appear anywhere, many have now figured out that they can significantly cut their bids & still get plenty of exposure.

Some ecommerce websites not only do ad retargeting to people who visited their website, but some go so far as to target the individual products you looked at or put in your cart. You may not notice the trend if you are shopping for things you purchase (as a reflection of our identity we generally tend to perceive the things we like as being normal & as being more widely popular than they are), but if you shop for something out of the blue then the ads that follow you are far more noticeable.

Sometimes I buy a gag gift to give away before the real gift so as to sorta mis-set expectations & see a range of responses. :)

When I was buying a 4th anniversary gift for my wife, while shopping online I joked with a friend about how ugly & over-the-top some of the Zales items were. Those items then started to follow me around the web in banner ads!

What is more valuable than seeing a person putting an item in a shopping cart is seeing the actual items a person has already purchased. Amazon suggests related products on their web pages, sends personalized "you might like" email recommendations, and is leveraging their data to build a distributed ad network:

Amazon will now use its huge supply of data to pool consumers into buckets based on the products they looked at or purchased on the retailer's website. The company will help advertisers reach these consumers with targeted media, using behaviorally targeted display ads to drive them to
any URL.

There are many other technologies & business models built off of retargeting: some businesses try to rent a pixel on 3rd party websites, some analytics services respawn cookies, Akamai's CDN offers pixel-free tracking, Facebook's like button collects data even if you do not click on it, and 3rd party social media "add to" buttons collect & sell similar data.

2. Integrated Media Buys

WebMD

WebMD has sponsored sections where you go from information to self-quiz right into integrated custom ad channels tied directly to the disease.

Blog Sponsorship

Pay Per Post sort of took the low road in their marketing approach with getting exposure on blogs. ReviewMe (which I co-founded & sold my share in many years ago) intended to take a somewhat higher road, but perhaps didn't attract as much brand attention as we had hoped for, at least not initially.

More recently many of the online blogging communities have become custom ad networks. Want to reach moms? P&G did a deal with BlogHer & it was popular enough that there are blog posts and videos about it.

YouTube

Shortly after watching a Youtube video about sugar and insulin I soon saw the following YouTube experience, with an ad over a video & another related ad unit off to the right

Taking the "be the content rather than the ad unit" one step further, YouTube has done custom ads for Nintendo, where the entire Youtube website interface reflected the game.

3. Watering Down of Network Quality

That mixing in of slop traffic only further drives down network pricing, but that only becomes such a big issue because of the other above changes. Part of why the fraudulent "inventory" on ad "networks" is appealing is that there is likely a far higher markup by the ad agency than there is when buying premium ad inventory.

"We just got u 34 trillion ad impressions...and these are 1/5th the cost of the other ones" sounds efficient & appealing. They can mystery meat up the margin a lot higher on the junk than they can on the premium & they can mix in enough ad retargeting into the aggregate buy so you don't know where the performance came from, but it looks ok in aggregate (so long as you don't look any deeper).

This is no different than email co-registration & incentivized leads being mixed in with quality SEO & PPC driven leads. Backfill with junk to increase volume, but mix in enough of the good stuff to keep the aggregate performance high enough to still make it worth doing, all the while arbitraging the value of existing brand strength & the additional yield from retargeting.

4. Search Engines as Stealth Web Portals

Want local? Use Google Places. Want video? Watch Google's YouTube. Looking to buy something? See the item listings in the search results. Need a stock quote? Its right in the search results.

A lot of the general purpose generic traffic that helped subsidize the large portals is now being ate by search engines like Google & Bing that are putting more data directly into the search results. This trend is even more significant than it appears on the surface when you consider investments in 3rd party companies that are arbitraging the search results (like Whaleshark Media), the inclusion of custom ad formats & lead generation funnels in the search results, and tests of vertical refinements currently being built out (in travel, deals, games and social networks like Google+).

5. The Next Big Issue? Author Identity & Retaining Talent

Services like Klout aim to create a currency out of a person's influence, which helps advertisers figure out who they should pitch.

Google's weighting on domain authority to some degree locks authors into their current jobs by making it hard for a new site to build up the initial momentum needed to become profitable. Google has implemented rel=author as a way to experiment with creating an author ranking system. If they are successful with it (and share author ratings publicly) that will give the most successful individual authors more leverage over the networks they write for, which in turn would only further weaken the big broad portals by making it easier for authors to jump ship and do their own thing.

"They [AOL] absolutely have some core assets, but I think you would have a hard time finding someone who would describe them as a 'must buy,'" says Craig Atkinson, chief digital officer at PHD, the media-buying unit owned by Omnicom Group Inc. - source

Affiliates Are a Dying Breed

Being an ecommerce affiliate keeps getting harder & harder unless you have a strong brand and/or are selling things with a complex sales cycle.

Portable air conditioners is a pretty niche category, but when I look at it I simply don't see any opportunity on the SEO front unless you take on the significant risk of carrying inventory & drop hundreds of thousands to millions of Dollars on branding.

The Corporate, The Bad & The Ugly

Tail keywords are every bit as ugly, with Google product ads sometimes coming in inline, further driving down the organic search results.

And it is nastier when Google Instant is still extended. 10% of browsers can see a single organic search result!

Corporate, Corporate, Corporate

As ugly as that looks, not only do the larger merchants have an advantage in AdWords (getting their product ads on a CPA basis while smaller merchants have to pay on a CPC basis), Google product search (more reviews), inline search navigation options (featuring the same brands yet again), but most of the organic results (that are generally below the fold) are also the same big brands after the Panda update gave them a boost while torching their smaller competitors.

The Chicken vs Egg Problem of Scale

For online pure-plays (outside of Amazon.com, eBay & a few others) the "no opportunity anywhere" problem in search also harms the ability to be competitive on pricing because without the ability to rank you don't have the leverage over the supply chain the way that the big box stores do from winning everywhere in the SERP & having offline distribution. There is little opportunity to organically grow to scale over time unless you enter the market with some point of leverage (like going so far as creating the product right on through to marketing it to consumers), sell something totally different than what is already available in the market (and hope it doesn't get cloned), buy out an existing company that went bankrupt, and/or build significant non-search distribution channels first.

I suppose the last option on that front would be to promote your stuff on a large platform that is already doing well in Google (say eBay, Amazon, or Facebook), but doing that gives you limited control over the customer experience & forces you to keep chasing new one-off sales rather than building & deepening relationships with customers.

Killing Off Diversity

As Google collects more usage date (mobile is already 12% of search) these big box stores will have an even bigger moat between them & smaller competitors.

The "big box stores only" search results also create an experience that is bland & uniform. At first glance things may look different, but it is the same type of sites again and again: a lot of the brands cross hire, have similar "politically correct" cultures & have roughly similar customer experience sets. When you buy from Walmart you are not going to get that caring email from a founder offering hands on tips & advice. Scale requires homoginization, which generally kills of personality & differentiation.

Killing Off Innovation

The problem with the "be huge or die" approach to search is that most legitimate economic innovation comes from smaller players that challenge the existing power structure. Set the barrier to entry too high and you might have less spam to fight, but you certainly will have less economic innovation & more of the would-be innovators will be stuck working dead end job at dysfunctional corporations.

Now You See it, Now You Don't

Most people can't see what they are missing out on so they won't know, but (as Tim Wu put it so eloquently in The Master Switch) the same was true for AT&T when it held back innovations like the answering machine & what ultimately came to be the WWW. What sort of price do you put on email taking a decade longer to launch? How many other disruptive changes built off of incremental improvements will never appear because they simply weren't large & corporate enough to compete on Google's web?

The web was great because it offered something different. Unfortunately you have to search using something other than Google to find it.

"When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it." - Frederic Bastiat

Business Ethics vs Sustainability

The concept of business ethics is usually a self-serving approach to marketing.

Some people would rather make money dishonestly than honestly, getting satisfaction out of screwing people over (hi Andy), but gray is a broad spectrum. To focus on "ethics" is to allow relative justifications & miss the broader issues.

Likewise, additional layers of complexity promoting more rules & incentives over wisdom ultimately destroys the skills and will to develop legitimate leadership.

Rather than adding additional layers of complexity, what we should ask is:

"Is what we are doing sustainable, or is it not?"

That which can not be sustained won't.

Eradicating Poverty Opportunity

As the world has grown richer poverty should eventually disappear, however it isn't. The public claims from the US of supporting & spreading democracy are inconsistent with blocking the ability of a Hatian to earn a livable wage. "The Obama administration pressured Haiti not to raise its minimum wage to 61 cents an hour."

How is THAT for left-leaning altruistic behavior?

While funding a large imperial army that blows trillions of Dollars on fraudulent wars (and jails those who tell the truth) the government also helps bankers grift a large % of GDP through outright malicious fraud (which is never prosecuted). To embed that much corruption into the core of a political system you can only really have "democracy" over here so long as you fund exploitation elsewhere.

The structural problems is that way to much of our productivity (and all our increased productivity in the past 3 decades) is going to the investor class. Any solution to our structural problems must, therefore, contain an element of redistributing wealth from rich to poor and middle class people.

Wearing Political Blinders?

One thing I like about SEO is it forces you to view systems & attempt to understand ecosystems. If you don't learn many valuable lessons about society the online market is so competitive that it can & will wipe you out.

Some market purists might cringe at the word "redistribution" but ultimately covering the losses of the banking class was exactly that. Except it worked counter to the free-market ideology those same bankers preach to everyone else.

I have been called right leaning & I have been called left leaning. But I see both "labels" as missing the broader point of what happens in reality. When a right wing president was in charge the bankers were allowed to commit endless crime without punishment. Based on disgust toward that fraud a left wing president was elected on the promise of hope & change. He then proceeded to screw the general public while fellatiating the banking class. He is a sell out.

Money > Human Life

One thing I question the legitimacy of is why capital gains are taxed at a lower rate than normal wages. Is a person's blood, sweat & tears worth less than compounding interest on money? There is some theory that the capital markets are more efficient if they are taxed lower & that makes the rest of society more efficient, but that theory fell flat on its face when the US government shoveled trillions of Dollars into the banks & none of the bankers went to jail (even though some of them have stated before congress that they knew 80% of their "product" was defective).

If a certain class of individual is inherently destabilizing, then why (other than fraud) do we keep "doubling down" on hoping that group of people will eventually change their approach (even as we shield them from the negative consequences of their own actions by making everyone else foot the bill)?

We block them off from the market feedback mechanisms we pride ourselves on pushing on everyone else. Yet if their failure causes anyone else to fail we claim that it was a combination of "free market forces" and an individuals lack of performance that is to blame for their own plight.

Sure some industries get disrupted, but when one industry goes down another rises up. Not with the banking fraud though, it is just an across-the-board kick in the nuts to almost every non-banker at the exact same time. Since our monetary system is a debt-based system, one person's savings is backed by another person's debt, thus most people are *required* to live pretty close to paycheck to paycheck. Yet it is considered totally reasonable for the Federal Reserve to destroy their store of wealth AND their ability to earn at the exact same time:

Deflation and outsourced jobs is creating a loss of purchasing power at the bottom and middle income strata. Housing wealth destruction and job stability are exacerbating this.

MEANWHILE in monetary land….inflation is being injected into the system by the Fed who lend money to rich people who then buy commodities, driving up prices, who buy bonds which lower savings rates and borrowing costs, and stocks which drives down dividend yields and increases cap gains.

Since those who lost trillions of Dollars through intentional malicious fraud can't accept the "free market" forces that they suggest everyone else should be subject to, the only solution is "more debt, please."

The same banking criminals who caused the mess are paid interest to loan the government its own money, so that the banks may "earn" their way out of the bankruptcies they earned through their fraudulent activities.

2 Groups of Citizens, 2 Books of Law

Some bankers were caught bid-rigging to rip off the government. Those who they committed bribery with are now in jail. The bankers once again have nobody in jail, even though they were engaged in the exact same crimes!

If we are intellectually honest, how is it that a person can go to jail for using a fairly soft drug like weed when the people who push hundreds of billions of Dollars of drug money (tied to much harder drugs & global violence) go unpunished?

If Markets Are Efficient...

There is no commodity in the world that is as commoditized as money is. Most of it doesn't even require actual printing, but is just digits on a computer screen...much like the digits I am typing right now. And yet the banking criminals have captured so much of governance that it is not uncommon to see them take 30% of corporate profits (and then shift the subsequent mirroring losses onto the public at large).

To claim that those huge profit margins (during fraud-driven bubbles) are reasonable AND that they deserved to be bailed out whenever they get things wrong is intellectually dishonest. If the taxpayer is capturing 100% of the downside risk, then why (other than fraud) are these banking criminals paid a single cent more than a person enlisted in the military?

Where Legitimate Innovation Comes From

Historically most valuable economic innovation (the legitimate kind, not the fraudulent financial engineering of the past decade) comes from individuals & smaller groups who challenge existing industries & powerful companies with creative destruction by making markets more efficient. The AT&T monopoly did a lot of great research, but anything that they thought could cannibalize their current business model did not see the light of day - sometimes for decades.

Exponential Growth in a Finite World?

We have a debt-based monetary system which requires exponential growth to prevent collapse, an oligarchy-based political system that punishes innovation & success while rewarding failure, and it exists in a finite world where we are reaching the peak production in key base-level economic inputs: like energy.

Vampires have often found it advantageous to maintain a hidden presence in humanity’s most powerful institutions. In the 1600s, it was the Catholic church, and today, as you all know, it’s Google, Fox News.

Another great thing about MixRank is how easy to use it is. Let's go step by step and see how powerful MixRank really is!

Step 1: Pick a Competitor to Research

MixRank makes is super easy to get started. Just start typing in a domain name and you'll see a suggested list of names along with the amount of ads available:

Here we are going to take a look at Groupon as we consider building a niche deals site. Keep in mind that MixRank is currently accepted free accounts while in beta so over time we can expect their portfolio to grow and grow.

MixRank breaks their tool down into 2 core parts:

Ads (text and display)

Traffic Sources

We'll cover all the options for both parts of the MixRank tool in the following sections.

Step 2: Working with Ad Data (Text and Display)

Let's start with text ad options. So with text ads you have 3 areas to look at:

Active Ads

Ad Reach

Best Performers

Here's a look at the interface:

As you can see, it is really simple to switch between different ad research options. Also, you can export all the results at any time.

The image above is for "Active Ads". In the active ads tab you'll get the following data points (all sortable):

Here you can export the data to manipulate in excel or do some sorting inside of MixRank to find the ads earning the lion's share of the traffic.

The Ad Reach tab shows up to 4 ads at a time and compares the publisher trends for those ads. To spread the love around let's look at a couple ads from LivingSocial.Com:

Here you can see that one ad crashed and fell more in line with an existing ad. You can compare up to 4 ads at once to get an idea of what kind of ad copy is or might be working best for this advertiser.

The Best Performers section compares, again, up to 4 ads at a time (use the arrows to move on to the next set) which have recently taken off across the network.

Needless to say, this report can give you ideas for new ad approaches and maybe even new products/markets to consider advertising on.

If the advertiser is running Banner Ads you can see those as well:

With Banner Ads, MixRank groups them by size and you can see all of them by clicking on the appropriate size link.

When you click on a banner ad you'll see this:

This is a good way to get ideas on which banner ads are sticking for your competitors. Also, it's a great way to get ideas of how to design your ads too. A little inspiration goes a long way :)

So that's how you work with the Ads option inside of MixRank. One thing I dig about MixRank is that it's so easy to use, the data is easy to understand and work with, and it does its intended job very well (ok, ok so 3 things!)

Step 3: Traffic Sources

Now that you have an idea of what type of text ads and banner ads are effective for your competition, it's time to move into what sites are likely the most profitable to advertise on.

MixRank gives you the following options with traffic sources:

Traffic Sources - domains being advertised on, last date when the ad was seen, average ad position and number of days seen over the last month

Reach - total number of publishers the advertiser is running ads on

The traffic sources tab shows:

Uniques - estimated number of unique visitors based on search traffic estimates

Last Seen - last date MixRank saw the ad

Days Seen - number of days over the last month MixRank saw the ad

Average Position - average position in the AdSense Block

A winning combination here would be recent last seen dates and a high number under the Days Seen category. This would be the advertiser has been and is running ads on the domain, indicating that it may be a profitable spot for them to be in.

Another tip here would be to target these domains as possible link acquisition targets for your link building campaign.

The Reach option is pretty self-explanatory; it shows the total number of publishers the advertiser is showing up on:

Another good way to evaluate traffic sources is to view the average position (remember, all the metrics are sortable). A high average position will confirm that the ads are pretty well targeted to the content of that particular domain.

Combine the high average position with Days Seen/Last Seen and you've got some well-targeted publishers. You can export all the data to excel and do multiple filters to bring the cream of crop to the top of your ad campaign planning.

MixRank is Looking Good

It's early on for MixRank but so far I like what I see. The tool can do so many things for your content network advertising, media buy planning, link building campaigns, and SEO campaigns that I feel it's an absolute no-brainer to sign up for right now.